Since its foray into the gambling industry, Bitcoin has turned the space upside down. The merger between the casino industry and this new form of money was a natural fit. On one hand, the casino industry provided one of the earliest opportunities for mainstream adoption of digital currency. And on the other, crypto addressed major bottlenecks associated with fiat gambling.
With the use of Bitcoin and other cryptocurrencies, punters enjoy the benefits of anonymous gambling, fast payment processing and inexpensive cash transfers. They also get access to a more diversified gaming experience as well as provable fairness thanks to blockchain technology.
However, as the price of Bitcoin goes through rollercoaster rides, questions arise on its suitability for the casino space.
Bitcoin Price Up By Nearly 80% in 2021
Between the beginning of January 2021 and mid-February, BTC price shot up by close to 80%. On February 19, it hit a high of $52,764 according to Coinmarketcap, translating to a more than 450% increase over one year. It is also up by 10.08% over the past seven days.
According to crypto analysts, a key factor behind the Bitcoin uptrend had to do with the increased interest from Wall Street bigwigs. Mastercard, BlackRock, PayPal and BNY Mellon are among the institutions that have given crypto a measure of legitimacy. Early in February 2021, Tesla’s announcement of purchasing $1.5 billion worth of crypto also triggered a massive rally.
However, JPMorgan analysts state that Bitcoin’s high volatility can pose significant risks for investors. Based on one measure, Bitcoin has a three-month realized volatility of 87% compared to gold’s 16%.
They also pointed to the fact that its rapid rise over the past five months had happened with considerably little inflow from institutional investors. In their view, its current value is unsustainable unless its volatility subsides.
In order to sustain the current momentum, the asset would require a substantial increase in real money flow. So, what does this mean for the Bitcoin casino industry?
Implications of Bitcoin’s Volatility on the Crypto Casino Space
Despite the numerous inherent merits, price volatility has always been one of the major weaknesses associated with BTC gambling. The risk associated with this is the fact that it has the potential to turn a massive win into a loss. For instance, if BTC’s price takes a nosedive after a win, a punter could end up with less in fiat currency than what he had when starting out.
On the bright side though, an upsurge in price would massively amplify winnings. Furthermore, the perceived demerits of volatility are significantly outnumbered by its benefits. Being able to play from any part of the world without geo-restrictions is one major benefit. There is also a potential for higher payouts as operators have significantly lower banking and compliance costs.
However, if the potential loss associated with BTC volatility seems to be a deal-breaker, there are alternatives. While at the onset most crypto casinos only accepted the flagship currency, the available options today are much more diversified.
A Bevy of Viable Options for Crypto Gambling
The emergence of cryptocurrencies has spawned an entire industry of options for punters and gamers. These are digital assets that exist solely to serve a purpose in the casino, gambling or sports betting industry.
The crypto casino industry’s value now is $549.99 million. In the past year, the value has shot up by a remarkable 245.16%.
Additionally, stablecoins offer a viable alternative to Bitcoin gambling. With these digital assets, users can avoid the volatility associated with crypto as the value is tied to that of a stable asset. Some are pegged to major fiat currencies such as the US dollar or the Euro, while others are tied to gold, oil or other stable real-world assets.
The best part about these alternatives is that they offer more or less the same benefits as Bitcoin gambling. But they do not have the same level of volatility as the king of crypto.
BTC Casinos – Here to Stay
BTC casinos provide such a remarkable quantum leap that they hold the promise of a vibrant future. Fortunately, taking advantage of their unique benefits is not limited to the use of any single cryptocurrency. As the crypto casino industry evolves, so do the options at players’ disposal.
There is every reason to believe that digital assets will continue dominating the gambling space in 2021 and thereafter. Though traditional options will remain an option, more casino operators will embrace the new form of currency so as to gain from its unique strengths.